The present invention relates generally to conducting commercial transactions, and more particularly, to conducting auctions.
Because it facilitates electronic communications between vendors and purchasers, the Internet is increasingly being used to conduct xe2x80x9celectronic commerce.xe2x80x9d The Internet comprises a vast number of computers and computer networks that are interconnected through communication channels. Electronic commerce refers generally to commercial transactions that are at least partially conducted using the computer systems of the parties to the transactions. For example, a purchaser can use a personal computer to connect via the Internet to a vendor""s computer. The purchaser can then interact with the vendor""s computer to conduct the transaction. Although many of the commercial transactions that are performed today could be performed via electronic commerce, the acceptance and wide-spread use of electronic commerce depends, in large part, upon the ease-of-use of conducting such electronic commerce. If electronic commerce can be easily conducted, then even the novice computer user will choose to engage in electronic commerce. Therefore, it is important that techniques be developed to facilitate conducting electronic commerce.
The World Wide Web portion of the Internet is especially conducive to conducting electronic commerce. Many web servers have been developed through which vendors can advertise and sell product. The products can include items (e.g., music) that are delivered electronically to the purchaser over the Internet and items (e.g., books) that are delivered through conventional distribution channels (e.g., a common carrier). More generally, an item is any product, server, or exchangeable entity of any type. A server computer system may provide an electronic version of a catalog that lists the items that are available. A user, who is a potential purchaser, may browse through the catalog using a browser and select various items that are to be purchased. When the user has completed selecting the items to be purchased, the server computer system then prompts the user for information to complete the ordering of the items. This purchaser-specific order information may include the purchaser""s name, the purchaser""s credit card number, and a shipping address for the order. The server computer system then typically confirms the order by sending a confirming web page to the client computer system and schedules shipment of the items.
The World Wide Web is also being used to conduct other types of commercial transactions. For example, some server computer systems have been developed to support the conducting of auctions electronically. To conduct an auction electronically, the seller of an item provides a definition of the auction via web pages to a server computer system. The definition includes a description of the item, an auction time period, and optionally a minimum bid. The server computer system then conducts the auction during the specified time period. Potential buyers can search the server computer system for an auction of interest. When such an auction is found, the potential buyer can view the bidding history for the auction and enter a bid for the item. When the auction is closed, the server computer system notifies the winning bidder and the seller (e.g., via electronic mail) so that they can complete the transaction.
FIG. 1 illustrates a web page through which a seller lists an item to be auctioned. The web page 100 includes a name field 101, a description field 102, an add-a-picture field 103, a minimum bid field 104, an auction type, field 105, and a duration field 106. A seller enters the name of the auction (e.g., xe2x80x9cBarbie Doll-1959xe2x80x9d) in the name field and a description of the item to be auctioned in the description field. If the seller has a picture of the item, the seller can provide a link to that picture in the add a picture field. The seller enters the minimum bid into the minimum bid field. The seller also selects the type of auction. In this example, the auction may be designated as xe2x80x9cstandardxe2x80x9d or xe2x80x9cDutch.xe2x80x9d A standard auction is an auction in which one item is to be auctioned and the bidder who places the highest bid wins the auction. A Dutch auction is an auction in which more than one of the same type of item is to be auctioned. For example, a seller may have 10 gold wrist watches to sell. In this example, a gold wrist watch is sold to the bidders who placed the 10 highest bids. In a Dutch auction, the final auction price is the price of the lowest winning bid. That is, each winning bidder pays the same amount as the lowest winning bid. The seller enters the duration of the auction in the duration field.
FIG. 2 illustrates a web page through which a bidder may bid for the item being auctioned. The web page 200 includes a name field 201, a detailed a information link 202, an auction status area 203, a bidding area 204, an at-a-glance link 205, a bid history link 206, and a detailed information area 207. The name field contains the name of the auction. The detailed information link allows the bidder to display detailed information about the item being auctioned, such as a picture and description of the item as shown in the detailed information area. The auction status area contains information describing the current state of the auction. For example, the auction status area identifies the seller, identifies the highest bidder, indicates when the auction will close, indicates the quantity of the item that is being auctioned, the number of bids that had been received, and the minimum bid. A bidder enters a bid through the bidding area. The bidder enters the maximum bid that they are willing to pay for the item and then selects the bid now button. The auction system may automatically place bids for the bidder up to that maximum amount. The bidder selects the bid now button to place the bid.
Although auctions have traditionally been seen as an efficient means to arrive at a fair market price for the item being auctioned, auctions of a fixed duration may see bidding activity clustered toward the end of the duration. That is, it appears that bidders maybe reluctant to place the first bid for an item. The bidders may delay placing their bids on the assumption that the final price will be higher if a bid is placed early in the auction. The belief among bidders may be that a long period of active bidding may result in a higher final price then a short period of active bidding. Sellers, of course, would like to encourage a long period of active bidding to maximize the final sale price. It would be desirable to have a bidding system that would encourage bidders to bid early and encourage bidding to precede at higher prices.
A method and system for conducting an auction is provided. The auction system provides a mechanism that allows the winning bidder to receive a discount from the winning bid amount when a certain discount criteria is met. In one embodiment, the discount criteria is met when the winning bidder was the first bidder to place the bid at the auction. That is, the bidder who places the first bid will receive a discount (e.g., 10%) if that bidder is ultimately successful in winning the auction. The mechanism tracks whether each auction is subject to a xe2x80x9cfirst bidder discountxe2x80x9d and whether the winning bidder was the first bidder. The offering of a first bidder discount and the amount of any discount may be at the discretion of the seller of the item. The offering of a first bidder discount may encourage bidders to start bidding early in the duration of an auction and to continue bidding to ensure that they receive the discount.
Many different discount criteria can be used to encourage bidders to bid at an auction. For example, the auction system may allow successive bidders to be eligible for successively smaller discounts. That is, the first bidder may receive a 10% discount, and the second bidder may receive a 5% discount. Also, the discount criteria can be independent of the order in which the bidders placed their first bids. For example, a winning bidder who places a bid that is at least 5% larger than the second highest bid may receive a 10% discount. Such a discount criteria may encourage bidders to bid at least 5% more than the current highest bid.